Believe those who are seeking the truth. Doubt those who find it. Andre Gide

Thursday, February 5, 2009

Gosh Darnit, Mr. Immelt

Another slow day. But trust General Electric's Chief Executive, Jeff Immelt, to provide us with some entertainment value (as opposed his real job of generating shareholder value). Check out the story here. Here is a quote:

The U.S. economy is in its worst shape since the deep recession of 1974 and 1975, and if it deteriorates further the most meaningful comparisons will be to the Great Depression. We're at least to 1974-75. Once you break through '74-'75, you don't stop 'til you get to 1929. Unlike the other downturns that I've been a part of, this one is faced with limited liquidity. If liquidity exists, it's not coming back readily. That's why the government's role in this cycle is so gosh-darned important.

Jeepers...I had no idea. But gosh-doodly, I suppose this is why he is paid the big bucks.

We're at least to 1974-75? What is he talking about? U.S. real per capita GDP 35 years ago was approximately 50% lower than it is today; see first figure here.

Oh, wait a second...I think he was referring to GE's stock price.

But you see, this is not Immelt's fault. Nosiree. Jack Welch (legendary former CEO of GE 1981-2001) never experienced anything like this. Things are "different" this time around. In particular, there appears to be a shortage of "liquidity;" or a "credit crunch." Nope...I can't recall people ever talking about a phenomenon like this before during an economic downturn. This is why the government's role in this cycle is so gosh-darned important.

And just what, pray tell, might that role be? Well...you know...the government should do something...and it should do it right away...anything really big...anything, I presume, to legitimize the view that things are really different this time around; and that poor share price performance really has nothing to do with poor executive decisions.

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"Believe those who are seeking the truth. Doubt those who find it." Andre Gide

The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The Republicans are the party that says government doesn't work and then they get elected and prove it (P.J. O'Rourke)

But to manipulate men, to propel them toward goals which you – the social reformers – see, but they may not, is to deny their human essence, to treat them as objects without wills of their own, and therefore to degrade them (Isaiah Berlin)

I believe that sex is one of the most natural, wholesome things that money can buy (Steve Martin)

Nothing so needs reforming like other people's habits (Samuel Clemens)